The Impacts of Drought on Southwest Tribal Economies

Abstract

AbstractDrought negatively impacts agricultural productivity, often causing reduced crop yields and damage to pasture and rangelands. Droughts are particularly concerning for Native American reservations in the arid United States Southwest, as agricultural production on the reservations provides an important economic base. This study evaluates the impacts of drought on the cattle and hay sectors and resulting economic impacts on tribal communities in Arizona, Nevada, New Mexico, and Utah. Panel data analysis is used to estimate the impacts of drought, assessed using the Palmer Drought Severity Index (PDSI), on reservation cattle inventory and hay yields. Then, the supply‐driven social accounting matrix approach is used to quantify the total economic impacts on tribal economies given hypothetical drought scenarios. Results show that drought impacts cattle production more than hay/forage production. Each additional year of drought reduces cattle inventory by 1.9% in the following year. Furthermore, for every unit decrease in PDSI each year, cattle inventory and hay yields decline by 0.3% and 0.4%, respectively. The drought scenarios examined result in hefty economic losses for large reservation areas such as the Uintah and Ouray Reservation, Navajo Nation, and Tohono O'odham Nation. To alleviate the negative impacts of drought on reservation economies, hurdles that limit tribal ability to mitigate and adapt to drought and climate change impacts should be addressed.